Procter & Gamble Co.
PG -0.53%
’s broad effort to boost growth ran into a buzz saw at the end of the year: the dollar’s rout of currencies around the world.

The consumer products giant called the widespread weakening of foreign currencies against the U.S. dollar unprecedented and said it led to declines in all of its main business segments. P&G said currency volatility will now reduce its sales by five percentage points and cost it $1.4 billion in profit over the course of the year that ends in June, far more than expected when the fiscal year began.

The blow from currency is an outgrowth of P&G’s successful expansion into overseas markets over the years. That expansion has left it heavily exposed to Russia’s plunging ruble, for example, and net short against the soaring Swiss franc, the company said Tuesday.

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To offset the impact, the maker of Gillette razors and Pampers diapers is relying on cost cuts including reduced head count and cutbacks in spending on marketing. That will include shifting more of advertising to digital channels, which already account for more than 30% of the total.

The company is also raising prices and shifting sources of its products, but those moves take time to have a pronounced effect on the bottom line.

“We have many things at our disposal, which we are obviously engaged in,” P&G Chief Financial Officer
Jon Moeller
said on conference call with the media. But, he added, “most of them come with some time lag.”

P&G’s warning came as the company reported weaker-than-expected results for the quarter that ended in December.

P&G has been slimming down layers of management and refocusing on the products that account for the bulk of its revenue and profit. Absent the currency effects, P&G’s business performed largely as expected. Organic sales, which strip out the effects of currency, acquisitions or disposals, rose 2%, with all but P&G’s beauty business, a longtime laggard, posting gains.

Unit volume was flat in the quarter, with volume down 2% in its beauty and personal care, grooming and health care units. The fabric segment posted a 2% increase.

The company said at the time that it was close to the sale of another 10 small brands, with information packets in the hands of potential buyers. In December, P&G agreed to sell its Camay and Zest soap brands to
Unilever
PLC. P&G has sold or shut down 35 brands as part of the culling, Mr. Moeller said Tuesday.

On the plus side, the company said the drop in the price of oil will give the company a $600 million annual boost before tax, most starting to arrive in the spring quarter. But it will be swamped by the hit from currencies.